Hope for a lasting ceasefire in the Iran conflict could boost the US stock market at the start of the week. After days of uncertainty, hope is rekindling that diplomacy will take the lead. Markets are currently oscillating between relief and caution. However, only sustainable diplomatic progress is likely to solidify confidence. Investors should also not count their chickens before they hatch. Past developments between Washington and Tehran have shown how quickly hopes for de-escalation can be replaced by an escalation. The Fed's interest rate decision is likely to be a highlight of the week, particularly around midweek.
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Ceasefire between the US and Iran - Investors likely to hope for diplomacy
Over the past weekend, the U.S. military reported no new attacks on Iranian targets for two consecutive nights. In response, the Iranian army had announced that it would also cease its attacks in the region. U.S. President Donald Trump said that Washington is currently in talks with Tehran. In this context, investors' peace fantasies are likely to increase again. Despite the recent de-escalation, however, geopolitical uncertainty is likely to persist.
US durable goods orders in focus – Fed meeting could decide the fate of the stock market week
The durable goods orders are already on the agenda (2:30 PM). Said goods are usually associated with higher capital expenditures, which can thus provide important clues about the activity of the U.S. economy.
The US Federal Reserve's (Fed) interest rate decision will be in focus midweek (8:00 PM). The new Fed Chairman, Kevin Warsh, is expected to be in public at 8:30 PM. Investors should scrutinize the aforementioned FOMC press conference for monetary policy clues. Whether the US currency guardian will adjust interest rates remains questionable. According to the CME Group's „Fed Watch Tool,“ 70.6 percent of market participants currently expect an interest rate pause, and 29.4 percent expect an interest rate hike of a quarter of a percentage point in total. The interest rate band currently stands at 3.50 to 3.75 percent.
Price data and GDP growth rate for the US on Thursday in focus
Later in the week, important US price data will be in focus on Thursday. The so-called core rate for personal consumption expenditures (2:30 PM) is expected. The GDP growth rate (quarter-over-quarter) for the US will also be published.
Number carousel ahead: U.S. earnings season could provide momentum
In the already ongoing US earnings season, the results of Boeing (ISIN: US0970231058), Coca-Cola (ISIN: US1912161007), PayPal (ISIN: US70450Y1038), Ford (ISIN: US3453708600), and Visa (ISIN: US92826C8394) for the past business quarter will be in focus on Tuesday. On Wednesday, Meta (ISIN: US30303M1027) and Microsoft (ISIN: US5949181045) will report, followed by Amazon (ISIN: US0231351067), Apple (ISIN: US0378331005), and Coinbase (ISIN: US19260Q1076) on Thursday.
